In mediation, your role as counsel is crucial in guiding your clients toward successful outcomes. Drawing on the insights from Thinking, Fast and Slow (Daniel Kahneman 2011) and Noise: A Flaw in Human Judgment (Daniel Kahneman, Olivier Sibony, Cass R. Sunsten 2021), you can better navigate the complexities of mediation by addressing not only cognitive biases but also the often-overlooked issue of noise that may affect your clients' decision-making.
Thinking, Fast and Slow describes two modes of thinking: System 1 and System 2.
System 1 thinking is fast, intuitive, and automatic. It leads to quick judgments and snap decisions. While it is efficient, it is also prone to errors and biases because it relies heavily on intuitive judgments and past experiences.
System 2 thinking is slower, more deliberate, and analytical. It is engaged when we carefully consider complex information and make thoughtful decisions. Encouraging your clients to engage System 2 thinking during mediation can help them make more reasoned and durable decisions.
Here is how these concepts can shape your approach in mediation:
Identify Biases: Help your clients recognize when they are relying on System 1 thinking, which might be influenced by cognitive biases such as anchoring, where initial offers disproportionately affect their judgment, or overconfidence, where they may underestimate the risks involved. By guiding them toward more reflective System 2 thinking, you can help them make more rational and balanced decisions.
Enhance Communication: By understanding whether a party is operating under System 1 or System 2 thinking, you can tailor your communication to either resonate with their intuitive thinking or encourage a shift to more critical, deliberate thought.
Improve Decision-Making: Encourage your clients to slow down and engage in System 2 thinking during mediation. This will lead to decisions that are more thoroughly vetted and likely to be fair and sustainable.
Noise: A Flaw in Human Judgment delves into the variability in human judgment, showing how numerous factors can cause similar situations to be judged differently. Noise refers to those random, inconsistent fluctuations in decision-making that can arise even when the same facts are presented. Unlike biases, which skew decisions in a particular direction, noise creates unpredictability and inconsistency.
Here are some examples of noise that might affect your clients in mediation:
Mood Swings: A client’s mood can significantly influence their judgment during mediation. For instance, if a client is feeling particularly anxious or upset due to external circumstances (like stress from work or personal life), they might be more prone to making hasty, emotionally driven decisions rather than carefully considering their options. This variability in judgment can lead to inconsistent decision-making, where a decision made today might differ from one made on a better day, despite the same underlying facts.
Time of Day: A client’s decision-making can be affected by the time of day. For example, a client may be more agreeable and willing to compromise in the morning when they are fresh but become more stubborn and less flexible in the afternoon as they grow tired. This can introduce noise into the process, as the client’s willingness to negotiate might vary depending on the timing of the mediation session.
Influence of External Factors: Noise can also be introduced by unrelated external factors, such as a recent financial gain or loss. For instance, if a client recently experienced a financial windfall, they might feel more confident and less risk-averse, leading them to push for a more aggressive settlement. Conversely, if they recently suffered a financial setback, they might become overly cautious, leading to decisions that do not fully reflect their best interests.
Peer Influence: If a client discusses a dispute with friends or colleagues who offer conflicting advice, this can create noise in their decision-making process. One day they might be influenced by a friend who suggests holding out for a better deal, while the next day they might lean toward a quick settlement after hearing a different perspective. This inconsistency can result in erratic decision-making during mediation.
Understanding sources of noise can help you better support your clients in making consistent, thoughtful decisions during mediation. By being aware of how these factors might affect your client’s judgment, you can work to mitigate their impact, leading to more stable and predictable outcomes.
By integrating the concepts of System 1 and System 2 thinking and actively addressing the issue of noise, you can guide your clients through mediation with greater clarity, and effectiveness.
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